ex Goldman Sachs Trader Tells Truth about Trading - Part 3

so talented people have migrated they've migrated to hedge funds or they trade their own money you know guys like myself you know you know guys like myself can earn as much if not more than we used to doing your own thing rather than going to work for an investment bank now so I would say it's difficult to say within the industry when overall the quality's gone down so you know I think it's a really tough job now for graduates you know if you're if you manage to get into these to get into these companies I think it's a tough situation because once you're there from my perspective from what I used to see and the people I used to work with a lot of these people just aren't around anymore so the talented people have all left so it's a bit of a minefield that you're going to turn up and learn from people that aren't really that talented or not very good at what they do because if you're talented you get paid you know what you get paid is is a I'm afraid to say a recognition of your talent okay but what happened what's happened in the industry now is it's in structural decline because of regulation so all the talented people who used to get paid all the money who used to be innovative entrepreneurial got paid the big bucks either now work for themselves or have gone to hedge funds or left the Western world altogether and now they're in emerging or frontier markets so within the investment banks I would still say Goldman Sachs is slightly heaven shoulders above most banks culturally I think pretty much outside of that everyone's the same you know it's it's difficult to differentiate anyone else yeah oh my god that's a pretty open-ended question could be here all night and from my experience actually in the professional and retail world because when I came out of the professional world I totally forgotten what it was like to trade with your own money now going to back to what I was talking about earlier where when I was 18 19 years old at uni getting up at 6 a.m. you know when lecture started at 9:10 you know I look back at that and now realize when I see retail traders probably the most important thing is you have to be a self-starter you have to be somebody who is highly motivated to go out into the world and seek out your own information and work for yourself now if you're doing it within a company when you're working for yourself you're really working for the company because there's a big collection of individuals with all all words self-interest called a company essentially and if you're on a trading desk all of those guys they're only fella bred self-starters no doubt about it you have to want to get up in the morning you have to love the market you have to seek out the information you have to come up with innovative ideas you have to be entrepreneurial do business with your clients and find ideas in the market that are going to make you a lot of money because the market hasn't realized the opportunity exists so to get those ideas you've got to go back to the basic which is you really have to be a self-starter we'll take one more yeah visionary experience it doesn't really is there anything you can't know I mean as in when you trigger yourself in anything that you can't learn by working for investment-backed meeting and then if you work to invest with being the only thing that you learn which kindly well traditionally the argument was the professionals see the order flow in the market therefore they have an information advantage well I can tell you when you're sitting at an investment bank on a trading desk internally they think everybody else has the advantage because what they're doing is trading with you know hedge funds the hedge funds are coming in and the market makers and the traders are taking the risk that the hedge funds are giving them so they're using the bank's balance sheet to make prices to hedge funds now a lot of hedge funds in the past have been what you describe is hot hot money so they come in and they know something that you didn't know and they take you out in a stock and you'd be short and they'd be long and then the stock would move 1020 percent against you you know so you know art investment banks traditionally the argument was from the outside from the retail trader and even from the hedge fund industry well they've gotten the order flow so they know whether a stock's going down or whether a stocks going up or an asset yeah whereas the guys investment banks think the information advantages outside out the hedge funds because they speak to everybody okay no longer the case at the investment banks really in terms of order flow because now everything's put in a machine so you know in the old days you used to be able to take an order in a stock and a lot of people would would use the order to believe the stock around you know push it to levels that they wanted it to go to just doesn't happen anymore everything goes in the Machine and then you've got other liquidity pools you know like the dark pools where people can trade without seeing counterparty without knowing what level they're trading up until they get the execution etc etc what's great about the Internet is honestly now I came out the professional side and I've done four years of trading with my own money again what's great about the Internet is all the information is actually there you can actually get it all for very cheap cost or free but what's more important is actually knowing how to interpret that information and turn it into real hard dollars so that's probably the most important thing so after retiring from the banking industry you took a took a year out traveling is that just the case of well end time off yeah I mean I don't I'm not scared to admit it you know after seven hundred seven a half years I was very button tat you know but I felt like I deserved a break you know when I grew up in Liverpool left from Liverpool when I was 18 to go to Manchester University went to university for three years was hired by Goldman in my final year for nine months time after my final exam which was a still remember the date June the 12th three weeks later I was on a plane to New York and I was working for Goldman so you know and then you have two weeks holiday yeah so I'd never had a break I've never seen the world so I wanted to go and do that and take a break and then reassess whilst uh you know I also thought the market was going down so being short in that situation when everyone's long you don't get paid at these places so it's a waste of time so you know offered to go back into the industry buy a few places but declined solve my property in London and got on a plane around the world for 14 months with one bag of clothes so you're your next venture was working on BBC program million-dollar traders how did that come about I was sitting on a beach in Brazil drinking a caipirinha and got a phone call from a guy used to work with at Goldman Sachs who has come up with the idea in the concept Lex fund amp and he literally point-blank asked me do you want to get involved in the TV program at this stage believe it or not traveling around the world this was like 13 months down the line traveling around the world seeing jungles cities beaches and bumming around for 30 months gets a little bit boring the grass is always greener right but I him I was bored so you know this situation was literally a good stepping stone to come back into the Western world after you've been away for so long you know just come back put yourself out there and you know I liked the the concept of it the idea that if we trained people and gave them a couple of weeks training and then gave them a million dollars and just let them loose on the market whilst the market environment was the worst it's ever been yeah we'd probably find some pretty interesting results so you know that from the outset the the objective of the show really was to show two things one that actually anybody can trade if you get the right instruction and you're willing to work a little bit at it and you have the kind of right mindset that's the first thing but also that it's actually quite tough you know not everybody can do it so I think you know a lot of people in the in the market like this gentleman over here we discuss in the conflict of interest earlier due to this conflict of interest in the the retail broker brokerage market you'll get told by a lot of people that anyone can do it yeah you'll get emails all the time make ten thousand dollars a month in the international forex market yeah the problem is is that not everyone can do it and a lot of it is lies so you have to be very very careful so we said we set out you know with an objective to prove that people can do it but in a certain way but not everyone can do it and I think it was you know pretty successful okay so well by doing that you must have created a public image so how did you how did you deal with that or how did that affect your life well I was when I came back I was the instance in terms of timetable what happened I came back May 2008 started filming the TV program two weeks later we actually did filming here upstairs we actually next door in the rooms here we interview people and then we did most of the training upset but in terms of trying table the show took about 10 weeks to film and then we finished filming on August the 31st Oh 8:00 and then I took off again I went traveling for another four months yeah because it was I wasn't here for any reason except that and then the show is aired January February oh nine and then I was back in London again and renting an apartment by Tower Bridge it became bit weird if you like because I'd used to walk into the city to see my old buddies and workmates you know for lunch we'd be sitting around and there was one situation which was a bit weird a guy ran across the street and picked me up inside hugging me it's like a guy in is like mid-40s I was like okay yeah yeah can I help you he's like thanking me he's like thank you so much thank you so much thank you so much I'm like why it's like my wife now understands what I do for a living but then there's other uncomfortable situations you know that's good stuff to know but it's a bit uncomfortable you know there's other uncomfortable situations like I was out maybe a month or two after the show is finished and a bunch of guys in the city were all drunk and they just surrounded me in a bar and would not let me leave they were like you're staying out with us the whole night they were just giving me drinks and drinks and drinks I just forcing me to stay out with them I like my friends believing in them like I can't believe I'm going to stay out with these people who are done even though

Channel: InstituteofTrading

Views: 765,943

Rating: 4.8667502 out of 5

Keywords: Interview, school, interviews, exclusive, goldman sachs, cass, business, graduates, morgan Stanley, banks, hedge funds, forex, stocks, commodities, institute, institute of trading, portfolio management, lex van dam, greg secker, university, city, wall street, million dollar traders, space expedition corporation, sxc, michiel mol, finance, Trading, Stock

Id: zn-uhqRlLzE

Length: 12min 36sec (756 seconds)

Published: Tue Mar 26 2013